Cargill just became the latest Minnesota company to expand in another state

Cargill, a Minnesota-based company just announced that it is opening an office hub in Atlanta, Georgia. The company will create 400 jobs there. Speaking of the move, the board chair and CEO of Cargill had the following to say.

Georgia and Atlanta are welcoming, business-friendly environments that provide an ideal backdrop for Cargill’s investment in technology and innovation…

Certainly, out-of-state businesses come to Minnesota all the time. So, a Minnesota company opening an office in another state is nothing to be alarmed about.

It is concerning, however, that this is becoming a common occurrence. Not only does Minnesota have one of the lowest rates of business creation, but businesses already established here are choosing the expand in other states as well. Cargill is not the first Minnesota headquarters company to choose to expand in other states, nor (as it seems) will it be the last.

A concerning trend

Since last year, for example, the Minnesota Chamber of Commerce has produced a report tracking business investments and expansions in Minnesota. In their most recent release, the Chamber noted that in 2023 Minnesota did see an overall increase in business business expansion activity.

However, as their 2023 report showed, Minnesota still trailed other states in the Midwest and the rest of the country in attracting business expansion. Additionally, Minnesota is losing more investments than it is attracting.

Specifically, the report found that

Minnesota ranked 8th among the 12 states in the Midwest in total project activity from 2018-2023, and consistently ranks between 8th to 12th in projects per capita within the

Compared to the rest of the country,

From 2018-2023, Minnesota-based companies invested in 355 projects in locations outside the state, resulting in an estimated $17.5 billion in capital expenditures and 31,255 jobs created. In comparison, Minnesota received 210 projects from out-of-state companies, totaling $12.7 billion and 20,914 jobs created locally. This shows continued net deficits in incoming and outgoing business investments.

High taxes and stringent regulations to blame

Demographic factors aside, Minnesota’s high taxes and stringent regulations are a big barrier to expansion. One survey respondent said, for instance,

Increasing regulations and governmentmandated programs — high costs and reduced
flexibility to meet the needs of our team members. High tax costs compared to the
other states we operate in. Due to regulations, mandated programs and taxes, it is easier and more economical to expand in other states

Unfortunately, this will only get worse after all the mandates that were passed in the 2024 legislative session.